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ELIZABETH:

From Schwartz Media, I’m Elizabeth Kulas. This is 7am.

MIKE:

Hydrogen will be a major renewable energy source in the near future, and can be produced by splitting water atoms. But the government is ignoring this low-carbon option in favor of a hydrogen industry run on fossil fuels. Mike Seccombe on how Angus Taylor and Matt Canavan are turning a green energy source brown.

ELIZABETH:

Mike, tell us about the media release that came from Angus Taylor and Matt Canavan last week?

MIKE:

The interesting thing about it is that Angus Taylor and Matt Canavan, two of the biggest supporters of fossil fuel in the parliament, were suddenly enthused about the prospects of clean energy. The press release was all about hydrogen, which is a wonderful fuel source. You know, when it's burned, it produces no greenhouse emissions at all. And they were they were, just talking up the prospects of hydrogen big time.

ELIZABETH:

Mike Seccombe is The Saturday Paper’s National Correspondent.

MIKE:

The release opened by promising that Australia would become, quote, a world leader in hydrogen production and export thanks to a new fund set up by the government.

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And then it went on to quote Taylor, the energy minister, predicting that Australia would become hydrogen supplier to the world.

Archival tape — Angus Taylor:

‘We have enormous opportunity to be a major exporter of energy in the future, just as we have been until now and will be in the coming years. And hydrogen is of enormous interest to these countries. I was in Japan…’

MIKE:

Canavan, the resources minister, who's run a scare campaign against renewables for as long as I can remember, saying that will cost jobs and, you know, damage the economy etc, was suddenly talking up the potential for thousands of new jobs and billions of dollars in economic growth between now and 2050, through the export of hydrogen to countries like Japan, South Korea, Singapore and Taiwan.

Archival tape — Matt Canavan:

‘There's a real interest in growing demand for hydrogen in our region and we are really the best place in the world for clean hydrogen to be produced.’

MIKE:

And the release went on to announce that they were giving $370 million in funding towards the implementation of a national hydrogen strategy, which has been worked up by Australia's chief scientist, Professor Alan Finkel, and was approved recently by the Council of Australian Governments Energy Council just the day before the press release came out.

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ELIZABETH:

So, Mike, before we go any further into sort of exactly what this press release is getting and what it means. How does hydrogen energy actually work?

MIKE:

Well, like gas and coal and other fossil fuels, it releases energy when it's burned. The difference is that when you use hydrogen, it doesn't produce carbon dioxide, which is the major greenhouse gas, it combines with oxygen to produce water as a waste product. So there's no carbon pollution involved in the use of it.

The production of it can be a different story, though, because hydrogen can be produced in a variety of ways. It can be produced from fossil fuels like coal and gas and that process does involve the release of carbon dioxide.

ELIZABETH:

Hmm.

MIKE:

Alternatively, it can be produced by a process of electrolysis whereby you split water atoms into their component parts, hydrogen and oxygen. So you know, no pollutants there.
However, this electrolysis process is very energy intensive. So what really matters here is where the energy comes from that you use to create the hydrogen in the first place. If it comes from a renewable source, a green source like solar or wind power, the result is a completely clean, storable, transportable form of energy.

Hydrogen’s actually a colourless gas, but experts in the field attribute colours to it. So that which is generated by renewables is called green hydrogen for fairly obvious reasons. If it comes from gas, they call it blue hydrogen, and if it comes from coal, they call it brown hydrogen.

ELIZABETH:

And what kind of hydrogen production is it that Taylor and Canavan are proposing? Is it green, blue or brown?

MIKE:

Taylor and Canavan are proposing that we go the brown hydrogen route by producing it from fossil fuels. We’re at something of a fork in the road here in Australia. What the energy experts are seeing, what the environmentalists are concerned about, and what appears to have come out of that recent COAG Energy Council meeting a couple of weeks back, was that the government appears to be, or is pretty clearly intent on taking us down the dirty hydrogen route of using fossil fuels.

ELIZABETH:

And what else happened at that meeting?

MIKE:

Well, I spoke with Shane Rattenbury, who's the ACT minister for Climate Change and Sustainability. And he went into the COAG meeting with a proposal to amend the National Hydrogen Strategy such that it supported only green hydrogen produced from renewable electricity.

Archival tape — Shane Rattenbury:

‘I argued that in the future countries are going to want only green hydrogen cause of course most other countries have a serious commitment to tackling climate change.’

MIKE:

He wanted to make it so the plan would mean hydrogen produced from fossil fuels would not be defined as clean. He tells me that in the meeting he got zero support for that idea from the federal ministers, from all his state colleagues, who were there.

He also had a second proposal, a sort of fallback position, whereby he proposed that if hydrogen were generated from fossil fuels using carbon capture and storage, it could only be defined as clean if a minimum of 90 per cent of the carbon dioxide emissions created in the process were captured. And that idea crashed and burned as well. None of the other states or territories backed him on that one.

ELIZABETH:

And where was Angus Taylor? I’m assuming he was in the meeting?

MIKE:

Taylor sort of added insult to injury, really, because Rattenbury says Taylor, who was running the meeting of course, rebuked him for trying to redefine what was considered to be clean hydrogen. Rattenbury says that Taylor told him, and I’m quoting what he said, ministers cannot amend the draft strategy.

Archival tape — Shane Rattenbury:

‘I find it extraordinary that the suggestion was made that ministers could not amend the draft document; ministers have that power and to say we don’t makes a mockery of us actually being at the meeting at all.’

MIKE:

Rattenbury responded. If ministers can't amend this, I don't know what we're doing with our jobs. Why have the meeting, which seems, seems an eminently sensible riposte to make.

ELIZABETH:

Fair enough, yeah.

MIKE:

Yeah, yeah. Fair enough. And he described the whole experience as galling and quite extraordinary. By far the most frustrating meeting that he's been to.

Archival tape — Shane Rattenbury:

I’ve never seen something like that happen before. It's a classic case of greenwashing, of saying we are going to produce this clean energy of the future just don’t look at the fact that we are producing it from brown coal or from natural gas.’

MIKE:

I should add, he was not critical of Alan Finkel. Finkel was given riding instructions that, that the proposal he came up with should be technology neutral. So Rattenbury has no problem with that in particular. In fact, he's quite happy that Finkel appears to be quite the apostle for hydrogen and also is calling for some kind of labeling method so that we know the source of the hydrogen.

ELIZABETH:

In other words, if we are using green, blue or brown sources, that has to be clearly labeled on the hydrogen production method.

MIKE:

Yes. Yeah. And you would have to know the carbon footprint of the process. That's right.

ELIZABETH:

And so, Mike, right now, where is the government spending and investing in the hydrogen energy technology?

MIKE:

Well, Australia is devoting far more money to efforts in pursuit of coal to hydrogen technology, which basically means propping up our fossil fuel sector.

ELIZABETH:

We’ll be right back.

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ELIZABETH:

Mike, we’re talking about the government investment in hydrogen energy, especially brown hydrogen that will essentially prop up the coal sector. Have projects of this nature actually started?

MIKE:

So the announcement of the money that was made by the two ministers in that press release, that was $370 million, only 70 million of that is earmarked specifically for work towards hydrogen from water. So a reasonably small part of the whole.

We do have one coal to hydrogen pilot plant about to get up and running, called the Hydrogen Energy Supply Chain, which is being put together by a consortium of Japanese and Australian interests at a cost of almost $500 million, which includes 50 million contribution from the federal government and another 50 million from the Victorian government. And this will result in a pilot plant beginning to operate for one year, next year 2020, and running until 2021.

Archival tape — Unidentified female:

‘The Hydrogen Energy Supply Chain project is a world first trial to demonstrate the production and safe transport of liquified hydrogen, using Australian brown coal from Victoria’s Latrobe Valley.’

MIKE:

During this period, the pilot plant is slated to produce at most three tonnes of hydrogen. And to achieve this three tonnes of hydrogen, it will use 160 tonnes of brown coal and will emit 100 tonnes of carbon dioxide. At this point, the pilot plant would not attempt any kind of capture and storage of the resulting carbon dioxide. So anyway, at the moment, we're spending the better part of $500 million to produce three tonnes of hydrogen and an awful lot of carbon dioxide.

ELIZABETH:

What about, kind of, costs related to these two different energy sources for hydrogen production? Like, what's the rationale behind investing in coal, the hydrogen instead of renewable sources?

MIKE:

At the moment, it seems to be the case that producing from fossil fuel is, is considerably cheaper if you don't do carbon capture and storage, possibly about line ball, if you do do carbon capture and storage. But the interesting thing is, costs are coming down pretty quickly for the electrolysis process. For the story, I spoke to Frank Jotzo, director of the Center for Climate and Energy Policy, and co-director of the Energy Transition Hub at the Australian National University. And numbers that that his people have done and also numbers from the International Energy Agency suggest that hydrogen from water is likely to become cost competitive within a decade. Somewhere in the 5 to 10 year range. So, you know, once once that happens, there doesn't seem to be much rationale for producing it.

ELIZABETH:

So Angus Taylor is saying he predicts Australia will become a world leader in hydrogen production and export. But will the countries that we’d be looking to export to be interested in anything other than green hydrogen?

MIKE:

Well, that's a good question and probably not.

Another of the country's leading experts on the subject, Associate Professor Malte Meinshausen of the Climate and Energy Ecology at the University of Melbourne, he's worried that Australia is backing the wrong horse by funding coal to hydrogen projects, and his view is based on considerable experience, he used to work in Europe, that if Australia goes with hydrogen produced from fossil fuels, then quote, “it shoots itself in the foot.”

Because the world simply will choose to buy green hydrogen if it can. And the European Union, he says, is moving towards hydrogen. Germany, in particular, he said, is already producing green hydrogen at reasonably significant scale. And his view is that in order to fulfill the future demand, because the demand is as yet relatively small but will grow rapidly according to all the predictions, it's vital that we get into the green hydrogen business because that's where the technology is leading.

I recall a few months ago, I went up to Brisbane to see Al Gore and Mike Cannon-Brooks talking about alternative energy and climate change. And Canonn-Brooks was suggesting that Australia should be aiming to generate 200 per cent of its domestic energy needs and exporting the extra 100 per cent. And at the time, I thought, wow, this is pretty big and this is a story. Well, now, in the intervening months, serious people are saying, well, no, why stop at that? Whynot 500 per cent, 700 per cent, one, 2000 per cent?

Hypothetically, this could lead to the reindustrialisation of Australia. You know, we could become the most cost-competitive place to do this kind of stuff.

ELIZABETH:

And Mike, you talked about a fork in the road earlier. Having worked on this story now, do you think we've taken a step down either of those paths yet or is there still time for us to make a decision about which way to go?

MIKE:

Ah, I think there's still time. The view in the hydrogen strategy, the Finkel report, is that we leave it up to the market to decide which technology it will be. But government policy influences the market. We're spending half a billion dollars on this pilot plant, well, that seems to me to be a fairly significant step down the road towards the fossil fuel option.

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We could quite easily go back the other way. There's some work being done in the country already on hydrogen from electrolysis. But it does seem to me that the government is putting most of its eggs in the fossil fuel basket on this one.

The great irony here is, as Taylor said, we could become hydrogen supplier to the world. But at the moment, the government is much more focused on becoming fossil fuel supplier to the world. We're running towards a tragedy of the commons in this country. We're not looking at the alternatives that could be good for the planet, good for the climate and potentially good for our economy as well. Instead, we're kowtowing to vested interests in the fossil fuel industry.

ELIZABETH:

Mike, thank you.

MIKE:

Thank you very much.

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ELIZABETH:

Elsewhere in the news:

The Morrison government repealed the medivac laws in the Senate on Wednesday, which had allowed refugees to come to Australia for medical treatment. Tasmanian Senator Jacqui Lambie held the crucial vote. She cited national security reasons as the basis for her decision to support the repeal, but refused to outline the details of her negotiations with the Coalition.

A tearful Lambie told the Senate, quote, "I'm not being coy or silly when I say I genuinely can't say what I proposed.” Labor and the Greens have accused Lambie and the government of striking a secret deal.

And Israel Folau has reached a confidential settlement with Rugby Australia. In a joint statement issued on Wednesday, both parties apologised and said that they did not intend to cause harm to one another. The settlement comes after Folau was sacked for social media posts that said homosexuals, adulterers, fornicators and drunkards were going to hell. According to court documents, in addition to an apology, Folau was seeking $14 million in compensation.

This is 7am. I’m Elizabeth Kulas. See you Friday.

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